Following initial claims that the upcoming Xbox 360 would be backwards compatible with all existing Xbox games, Microsoft has issued a clarification of its original statement. Due to hardware incompatibilities, existing Xbox games will need to be recompiled and re-released in order to be playable on Microsoft's next-generation console.

The hardware difference is two-fold. While the original Xbox uses NVIDIA graphics technology, Microsoft has selected ATI to provide the graphics hardware for the Xbox 360. In addition, the IBM PowerPC architecture of the Xbox 360 is very different from the Intel technology currently powering the Xbox's processor.

With both Sony and Nintendo confirming full backwards compatibility with their current generation of games in their upcoming consoles, Microsoft has proposed that some existing Xbox games will be recompiled for the Xbox 360, starting with the titles in its Halo franchise. Microsoft did not reveal how these recompiled versions would be released, though there exists the possibility that select games may be resold in their Xbox 360-friendly forms. Though not yet confirmed, it is likely that not all Xbox games will be re-released for the Xbox 360.

Count on RPGamer to bring you the latest news on the Xbox 360 and its Nintendo and Sony counterparts as our E3 coverage continues.